FINANCIAL RESEARCHER Lou Harvey, 68, is the founder of Boston's Dalbar, which rates investment firms and fund companies based on customer performance and product quality and service. The important thing for this year's study is that it's the first time we've been able to do a deep analysis of what happened after the 2008 market upheaval. We've been able to look at the effect of those events on investor behavior. What the study shows in the broadest sense is an unwillingness on the part of the investing public to rethink investment principles

The law, named after its principal authors, Connecticut Senator Christopher Dodd and Massachusetts Representative Barney Frank, gives the government new authority to unwind failing financial firms that may threaten the entire system, imposes new rules on derivatives markets and creates a consumer-protection agency at the Federal Reserve to monitor everything from home loans to credit cards. The Treasury Department and other officials now begin writing the regulations that will give the framework for enforcing the law, a process that may take a year.

The Labor Department reported that consumer prices fell 0.1 percent in June, down for the third straight month, paced by further declines in energy prices. On a year-over-year basis, the government’s measure of annual inflation fell from 2.0 percent in May to just 1.1 percent in June, the lowest level since last October when the price index first pushed back into positive territory after almost a year of negative numbers.

 The US stock market has now become a concentrated pool in which just the top 99 stocks account for 50.09% of total domestic trading volume. In June, the top 20 stocks accounted for 28.94% of all domestic volume, an increase of 2.2% over May's 26.7% and a record. The top 978 names represented 90.01% of total domestic volume, while the remaining 17,597 accounted for just 10% of all dollars traded. Of this, the bottom 12,112 stocks represented less than 0.05% of daily domestic volume.

The national debt will reach 62 percent of gross domestic product (GDP) by the end of this year, the nonpartisan Congressional Budget Office (CBO) said Wednesday. The budget office said the debt will reach its highest percentage of GDP since the end of World War II. The jump is driven by lower tax revenues and higher federal spending in the recent recession. By contrast, GDP has averaged "a little above" 36 percent per year over the past 40 years.

Fannie Mae and Freddie Mac took over a foreclosed home roughly every 90 seconds during the first three months of the year. They owned 163,828 houses at the end of March, a virtual city with more houses than Seattle. The mortgage finance companies, created by Congress to help Americans buy homes, have become two of the nation’s largest landlords. For all the focus on the historic federal rescue of the banking industry, it is the government’s decision to seize Fannie Mae and Freddie Mac in September 2008 that is likely to cost taxpayers the most money. So far the tab stands at $145.9 billion, and it grows with every foreclosure of a three-bedroom home with a two-car garage one hour from Phoenix. The Congressional Budget Office has predicted that the final bill could reach $389 billion.

European leaders meet in Brussels amid growing fears that Spain, Europe's fifth-largest economy, is preparing to ask for a bailout which would dwarf the €110bn (£90bn) rescue plan for Greece. The Spanish government dismissed reports that it was already in discussions with the European Commission, International Monetary Fund and the US Treasury for a rescue package worth up to €250bn. Officials in Madrid, Brussels and Paris were forced to deny that a Spanish bailout - which would take the European debt and euro crisis into a potentially dangerous new phase - was on the Brussels summit agenda.

Don and Perry were guest hosts on the nationally syndicated Mike Siegel Show. They discussed the ongoing credit crisis in the EU, including the bailout that Spain still says they do not need (but will readily except). 

Strategic asset allocation has a powerful hold on people.  Investors seem completely willing to forgive and forget all of the problems with it–apparently no matter how much pain or harm it caused. Investors who had dutifully spread their eggs among multiple baskets and stayed the course, a.k.a. buy and hold, watched helplessly from the sidelines as their retirement accounts lost a collective $2.8 trillion between the market peak in October 2007 and the trough in March 2009, the Center for Retirement Research at Boston College reports.

The market jitters afflicting countries along the euro-zone’s fringe appear to be starting to rattle even so-called “core” countries like France, Germany and the Netherlands.On Friday, rumors about losses at French banks and comparisons of Hungary to Greece hammered stock markets after early gains. A worse-than-expected picture of U.S. job growth didn’t help. The derivatives market, however, gave off some worrying signals. While the cost of insuring against Greek, Portuguese, Hungarian, Irish, Italian and Spanish defaults jumped, similar costs for France and even Germany – an economy likely to expand 3% to 4% this quarter – also jumped.

Seth Klarman is worth listening to, especially when markets go mad. Mr. Klarman is president of the Baupost Group, an investment firm in Boston that manages $22 billion. His three private partnerships have returned an annual average of around 19% since inception in 1983—and nearly 17% annually over the past decade, as stocks went nowhere. But the professorial Mr. Klarman speaks in public about as often as the Himalayan yeti. In a recent letter to his clients, when he compared the financial markets to a Hostess Twinkie. "There is no nutritional value," he said. "There is nothing natural in the markets. Everything is being manipulated by the government."

Greece is considering taking legal action against U.S. investment banks that might have contributed to the country’s debt crisis, Prime Minister George Papandreou said. “Greece will look into the past and see how things went,” Papandreou said. “There are similar investigations going on in other countries and in the United States. This is where I think, yes, the financial sector, I hear the words fraud and lack of transparency. So yes, yes, there is great responsibility here.”

Here is the naked truth: capital markets are designed to reallocate money from dumb people to smart people.  If that weren’t true, smart people wouldn’t play.  Smart people don’t play unless they have a probability of winning.  For example, smart people don’t tend to play the lottery.  (If you have ever wondered why the PowerBall winner is always a nitwit and flat broke again in three years, now you know.)  Although the first sentence of this article is for shock value, the naked truth is actually quite comforting.

U.S. stocks tumbled the most in a year on concern that Europe’s debt crisis will halt the global recovery. The selloff erased $1.25 trillion in market value as the Dow Jones Industrial Average fell almost 1,000 points, its biggest intraday loss since 1987, before paring losses. The Dow average ended the session down 347.8 points, or 3.2 percent, at 10,520.32 at the 4 p.m. close of trading in New York. The Standard & Poor’s 500 Index fell as much as 8.6 percent, its biggest plunge since December 2008, before trimming declines to end at 1,128.15, down 3.2 percent. It was the biggest drop since April 20, 2009, for both measures.

In his speech and in a two-part article he is co-authoring in the CFA Institute’s March/April 2010 Financial Analysts Journal (along with Morningstar/Ibbotson’s James Xiong, Tom Idzorek, and Peng Chen), Roger G. Ibbotson revisits the Brinson-Hood-Bebower contention that asset allocation accounts for 90% of a portfolio’s return, arguing instead that the sources of variation of returns from a portfolio are around 75% from the overall market, with the remainder about equally split from portfolio-specific asset allocation policies and from individual securities in the portfolio, along with the timing of trades, and fees.

Tom Dorsey began his financial career as a stockbroker at Merrill Lynch Pierce Fenner & Smith in 1974 and then was offered the opportunity to manage the Options Strategy Department at Wheat, First Securities. In January 1987, he left Wheat, First Securities to start Dorsey, Wright & Associates as an outsourced Options Strategy firm. After the crash, Dorsey realized that the Options business would never be the same. He changed the company’s focus from an options strategy firm to an equity research company, primarily because any option strategy first begins with researching the underlying stock. Today the company employees 16 people with clients spanning the globe in addition to managing over $700 million in assets through Separately Managed Accounts, Annuities, Mutual Funds, and Exchange Traded Funds (ETFs). Mr. Dorsey has 34 years of experience in the financial services business and is the author of numerous books on the Point & Figure methodology as well as motivational books. Mr. Dorsey is an award winning speaker having taught the Point & Figure methodology throughout the world.

Goldman Sachs Group Inc was charged with fraud on Friday by U.S. securities regulators in the structuring and marketing of a debt product tied to subprime mortgages. The Securities and Exchange Commission lawsuit alleges that Paulson & Co, a major hedge fund run by the billionaire John Paulson, worked with Goldman in creating the collateralized debt obligation, and stood to benefit as its value fell, costing investors more than $1 billion.

Emerging markets, because of their characteristics, should matter a great deal to investors today. Investors handicap themselves by limiting how much they invest in emerging markets.The differences that justified the segregation of emerging and developed markets have disappeared or are in the process of disappearing.

No investor will ever admit to a desire to buy losers in the stock market but when their behavior is examined, that is exactly what they do. This seems to be a very strange behavior for thoughtful and careful investors who are making investment decisions that will affect their financial well-being.

The bursting of the real estate bubble and the ensuing recession have hurt jobs, home prices and now Social Security. This year, the system will pay out more in benefits than it receives in payroll taxes, an important threshold it was not expected to cross until at least 2016, according to the Congressional Budget Office.

Walk into any big-box store in the country and you’d be forgiven for thinking that nothing is made in America anymore. Yet even as countless U.S. companies have moved production to other countries, American factories continue to churn out hundreds of billions of dollars worth of goods annually — everything from Ford trucks and Boeing airplanes to Gordon & Smith surfboards and Viking appliances.

In recent months, you've probably heard a lot about the benefits of converting traditional pre-tax individual retirement accounts into Roth IRAs. But here's something you may not have heard: Many taxpayers should run, not walk, from a Roth conversion. We will tell you why.

Even as many Americans are still struggling to recover from the country's worst economic downturn since the Great Depression, another crisis - one that will be even worse than the current one - is looming, according to a new report from a group of leading economists, financiers, and former federal regulators.

January mass layoffs edge up on weak manufacturing data.

MPT (standard asset allocation modeling) is largely dependent on normal distribution. Market returns are assumed to cluster in the center of the bell curve while the infrequent big changes dot the outer edges. All price changes are independent of each other, there are no trends. The market is efficient, everything that can be known about a given security is reflected in its current price. You can control your risk exposure with proper diversification. We do not believe any of these things are true, but there are other strategies that can clear these things up.

Unemployment may have dropped below 10% last month, but the number only looks good in a vacuum. The Bureau of Labor Statistics , the bearer of much of the federal government’s bad news over the last two years, said that the number of jobs open in America dropped to 2.5 million in December. That was a sharp decline from 3.2 million in the same month of 2008. The BLS reported that “Over the 12 months ending in December, hires totaled 49.4 million and separations totaled 53.6 million, yielding a net employment loss of 4.2 million.”

After cutting taxes for 95% of working families in his first year, President Obama has proposed a budget that would raise taxes on 100% of them. Even as the White House calls for another quick shot of stimulus to speed up job creation, its new 10-year budget promises to impose a fiscal regimen of major tax hikes and modest spending curbs.

Since the start of the recession two years ago, corporate and consumer balance sheets have been engaged in a forced bout of cutbacks that figure prominently in fourth-quarter earnings reports coming out now. The signs are everywhere. General Electric Co.'s chief financial officer on Friday referred to the "focused shrinkage" of its financial unit. A day earlier, Target Corp. said it plans to test stores that will have 50% fewer items.

Are bonds the next bubble?

Investors poured money into bonds and bond funds last year in search of safety and higher returns. Now the bond advantage is shrinking as risks are rising. "It has a bubble look to it," says Thomas Atteberry, the manager of FPA New Income, one of the largest independent bond funds.

Mr. Ken Gronbach is an expert demographer, futurist and generational markete.  Gronbach has founded 2 advertising agencies in his lifetime.

It is one of the bleakest new years that states have seen in over a decade.

The Federal Deposit Insurance Corp., overseeing the dissolution of failed banks at the fastest pace in 17 years, boosted its 2010 budget 56 percent to $4 billion to manage further shutdowns. The additional 1,643 FDIC staff will include 1,559 temporary workers and 84 permanent employees, with a majority of positions added to the division that handles bank failures.

 
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Don't tax you, don't tax me, tax that fellow behind the tree." Those famous words were spoken more than 30 years ago by the late Louisiana Sen. Russel B. Long when Congress was looking for ways to raise revenue. Some members of Congress believe they've found the fellow behind the tree: the Wall Street "speculator."

 
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We will review what San Francisco Fed President Janet L. Yellen has to say about how things are shaping up. The big issue is how strong the upturn will be. With such enormous reservoirs of slack in the form of high unemployment and idle productive capacity, we need a strong rebound to put unemployed people back to work and get underutilized factories, offices, and stores humming again.

80% of the top US economists believe that the recession is over. Is it time to send up a cheer or stay hunkered down? What will the recovery look like, when will the jobs be back and when does consumer spending kick in?

80% of the top US economists believe that the recession is over. Is it time to send up a cheer or stay hunkered down? What will the recovery look like, when will the jobs be back and when does consumer spending kick in?

This is shaping up to be a great time for US consumers, America is on sale. With companies competing for every dollar of income, the consumer is the big winner.

This inevitable shift in consumer spending is going to make it tougher for the very people who need the savings to get the funds put away. How is your retirement plan looking?

It has been a year since the credit meltdown and the collapse of investment banker, Lehman Brothers. The question remains about whether cronyism kept their competitors alive of if the likes of Goldman Sachs should have been allowed to face bankruptcy court, too.

Here in the United States we are debating a major change in our health care system and the difficulties of paying for it. We are trying to implement a national policy that most Europeans are trying to unwind due to unmanageable costs.

This week’s poll asked how you are dealing with investment decisions. Market volatility has not gone away. Many issues remain for investors to work their way back to financial health in their personal portfolios and their 401k accounts...

This week’s poll addresses the impact of the current recession on consumer behavior and the willingness of citizens to support state services during an extended recession. Don and Perry will discuss the responses from the radio audience that participated in the poll and what should be expected from local and state government as we work our way through the Great Recession.

Neither President Obama nor his Administration has published any proposed changes to our healthcare system. He has talked a lot and criticized much. However, the only published proposal – HR 3200 -- is from the House of Representatives. A copy is available by clicking on this link.

Here are just some of the discussions you'll hear on this week's show:

During his speech at a National Press Club luncheon, House Judiciary Chairman John Conyers (D-Mich.), questioned the point of lawmakers reading the health care bill.

For the  9th consecutive year Investor Resources, Inc. is in Wealth Manager Magazine among Top Dogs of independent investment advisory firms.

For the  9th consecutive year Investor Resources, Inc. is in Wealth Manager Magazine among Top Dogs of independent investment advisory firms.

Don and Perry will be interviewing Roger Sherrard this weekend. Roger is a local attorney specializing in real estate law and estate planning. We will be discussing pros and cons of various estate planning techniques, the impending change in estate tax law and what actions need to be taken to preserve the most possible ...

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station ...

For the Mackinac Center, Folsom has authored dozens of widely reprinted articles about Michigan's rich and varied past as well as a 1997 book, Empire Builders: How Michigan Entrepreneurs Helped Make America Great.

Prior to the mid-80s, powerful personal computers were not available to let us compare consumer spending data and the historic performance of our economy and determine the predictable nature of either.

Don and Perry will be interviewing Gary Cox, CFA, with Genworth Financial Asset Management. Genworth manages various global investment strategies with a strong focus on preserving capital in difficult markets...

Prior to the mid-80s, powerful personal computers were not available to let us compare consumer spending data and the historic performance of our economy and determine the predictable nature of either...

Using exciting new research developed from years of hands-on business experience, Harry S. Dent, Jr. offers a refreshingly positive and understandable view of the economic future. As a best selling author on economics, Mr. Dent is the developer of The Dent Method - an economic forecasting approach based on changes in demographic trends.

President, Foudy Insurance Agencies, Inc., an employee benefits agency specializing in the sale and service of life insurance, group health insurance as well as related products to small employers in the greater Southern California area.

Our average size client has approximately 40 employees. The products we promote and service include individual and group Life, Medical, Dental, Disability, Long Term Care, MediCare Supplement plans as well as qualified and non-qualified retirement plans.

Don rips into the Chrysler bankruptcy & the results of the listener poll questions on that subject. Followed by a can't miss discussion on the change in taxes and the effect it is having on state financing.

Don delves into current issues concerning the economy and increasing difficulties we have shifting our economic reference from an inflationary to a deflationary environment. Reality has been changing. It is hard for us to change our attitudes.

This past week protesters in cities throughout America participated in the "New American Tea Party", speaking out against what they considered to be unfair taxation.

The trend for countries around the world is to slash corporate tax rates to spur economic growth, yet Washington has yet to come to grips with this financial reality...

Maybe Jay Leno should host Meet the Press. Bowling and canine questions aside, Leno pressed President Barack Obama hard on the House’s vote to strip AIG employees of their retention bonuses via the tax code...